Currently, we require our staff to submit receipts for expenses $50 and over. This is only when they are using their corporate purchasing/T&E card. What do other companies require as a threshold for receipts?
What dollar amount do you require receipts for backup on expense reports.
Answers
Based on what we see across our customer base (it does vary a decent amount): While the IRS requirement is receipts above $75, very very few companies use that as their policy. The most common requirement is to include a receipt/image for expenses above $25. We do have clients who require every receipt (even for a bottle of water) and others who fall between (like $10). Sometimes, the requirement varies by the country the employee is based in. Keep in mind that credit card statements are not enough per the IRS but some companies will set a higher requirement if the expense is on a company card that is billed directly to the company because at least they know the employee spent that money and have some info on the expense as opposed to a cash receipt.
Happy to provide more info or suggestions - we even have a
Our company requires receipt for expenses over $20 and a receipt for direct expenses for air fare and hotel requiring receipts.
My experience is that Garry's thresholds are typical.
we have been running at $25
We increased ours from $25 to $75 this year. Our thought process was that even where we questioned the business purpose and thus reimbursability of a particular expense, we never really questioned whether the money was actually spent (which of course is all that the receipt proves). A secondary rationalization was that if we were concerned that an employee was padding his or her expenses $10-20 at a time, we probably have the wrong employee anyway and that's going to show itself in other ways. We are a professional services firm and try to treat our people as such (until proven otherwise).
1
Very interesting and sounds like a policy that works well for you. Have you done any comparisons on expenses submitted before and after the change? For example, we have had customers who have noticed interesting changes after implementing our solution (for example, a reduction in some categories like Tips or Other which employees evidently used as a plug for receipts they lost). I definitely agree with you that there needs to be a level of trust with employees and think that someone who wants to commit minor fraud is nearly impossible to stop. One of the things we see is that some rules can help employees do more to govern themselves - on this issue, expenses that require a receipt may be ones that some employees consider more carefully before submitting.
We are a non profit and require receipts over $25 when using our corp credit card and require all receipts when submitting out of pocket (cash) expenses. I'd like to know, however, when using the corp card, are receipts even necessary at all?
1
Yes, the credit card bill is not enough for the IRS - the original receipt (or scan of the original) is needed above $75 in general.
IRS says $75. Depending on business I've set as low as $25.
But the basis of decision is reasonableness of the expense.
Filed Under:
FP&A